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Sale of NNPC refineries and matters arising



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WHEN the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Dr Ibe Kachikwu said in Port Harcourt that the Federal Government “has no plan to sell any of the refineries, but may encourage joint venture investments in the facilities,” he spoke the truth though he failed to add that the corporation was already prepared to sell the three and half plants but for the refusal of President Buhari to support such move.
His words: “There will never be a plan to sell the refineries. There might be a plan to have joint venture investors, but that is going to depend on how the refineries are going to work on their own. Obviously, we are going to be looking at all options to make the refineries 100 per cent efficient.”
“In terms of crude supply, you know we have cancelled the crude supply by vessel contracts. We are going to use some stop-gap measures to use our own internal supplies from now till when the new contracts are looked at. The intent is to have the pipelines work.”
“I am very focused on the pipelines; it is no longer a good enough excuse that people are sabotaging the pipelines. We have got to deal with those saboteurs and we are going to go extremely tough on this. If we can make the pipelines work, we will get crude supply and get higher volume easier.”
“We are on the verge of bringing in a lot of engineers to help with pipeline protection. We should be looking at aerial surveillance by helicopters, surveillance by the military and obviously naval surveillance as long as we can. But we have to also engage the communities.”
With every decision whether political or socio-economic President Mohammadu Buhari has thus far made in his first 100 days in office, he has convincingly shown that he was not trained to accept impossibilities especially where security is the issue.
Did NNPC actually recommend the sale of the nation’s three and half refineries in Port Harcourt? The answer is an emphatic yes! The corporation was convinced that it is a better business option for it to dispose the refineries due to some challenges which it described as “critical elements, that has continually hinder their effective operation in the hands of the Federal Government.” It was actually the NNPC Stock Reconciliation Committee that recommended the sale of the plants after its meeting in Abuja to assess the performance of the refineries and the corporation’s pipeline network system.
Why can government not run the refineries profitably if private companies can? How will the private establishments overcome the problems mentioned for wanting to privatize the refineries? Why will private establishments want to buy refineries that appear to be unprofitable to operate?
The main problem isn’t with running the refineries but with getting the crude oil to them safely, efficiently and at reasonable costs. Selling the plants will not solve these problems but shift liability to new owners. No doubt, most Nigerians would agree totally with President Buhari’s position that the enumerated problems are socio-political and can be solve without selling the refineries.
If private companies buy the refineries with the existing federal government regulated pricing system, it will be useless and the investors will not be able to provide us with any fuel at the pump stations. If the new buyers cannot get crude oil through the pipelines and cannot sell their finished products at market determined prices, then the whole exercise will become a failure and further destabilize the supply of fuel at the petrol stations.
The main issue in the NNPC canvass was the crude oil availability which is directly tied to the security of the corporation’s pipeline networks especially those that supplies crude oil to the refineries. From all sides of the argument, it is clear that the major problem is the protection of oil pipelines both the ones that supply crude feedstock to the refineries and the network that distributes the refineries’ products to different parts of the country. So it boils down to the issue of security of infrastructures
The question is: Between the NNPC and the military, who should bear the responsibility of safeguarding the oil pipelines?
The issue of protecting the pipeline networks should no longer be left for the NNPC as the corporation has glaringly shown that it is handicapped to carry out that responsibility given the magnitude, spread, and above all the cost of fixing back vandalised oil pipelines which most times are not budgeted for. With about 250 points being attacked on a monthly basis, and the huge cost of putting them back in shape, there is no way the NNPC can sustain paying for such losses.
The NNPC should completely hands off issues of oil pipeline protection. Anyhow the federal government wants to protect such facilities, they should do it without leaving it to the NNPC as if it has become the corporation’s responsibility to defend/protect critical infrastructures in the country. Pipeline protection is a national security issue and should be handled as such.
These days, protection of pipeline is made easy with technology and it is curious why we are considering deploying available high level technologies including use of drones along that line. The army and the Navy should be counted out because they have failed woefully in all their task force in the Niger Delta. Very few well trained personnel can be deployed to man such technologies to adequately protect our pipeline networks without wasting too much human and financial resource.
As a quick measure, the Federal Government should ask the Nigerian Airforce to take over pipeline surveillance and let’s see if we can get a different result from what the army and the navy in their joint taskforce had given us.
Those who are interested in buying them at give away price should go and set up their own. With good management and dedication as we are seeing in the new NNPC, strong political will as our president is providing, and the right attitude, walahi, our refineries can work optimally.

(IFEANYI IZEZE: [email protected]; 234-8033043009)

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